State offers cash lifeline to newspaper

The state of New Hampshire has agreed to bankroll a struggling daily newspaper, the Eagle Times in Claremont. It will guarantee 75% of a $250,000 line of credit to the publishing company.

The Eagle Times reopened under new ownership last month after declaring bankruptcy in July and failing to publish for more than three months. Its publisher, Harry Hartman, explained:

"It has nothing to do with us getting any type of bailout from the state to start this newspaper up. We came back and revived it with all our own money. The line of credit is just that - a line of credit just in case."

New Hampshire's governor, John Lynch, said the credit guarantee was appropriate for economic development. The newspaper had 66 full-time workers when it closed and has about 30 workers now.

It is the first example of a state agreeing to such a deal, though at least two other states have explored similar initiatives in the face of the newspaper industry's rapid decline.

Stephen Farnsworth, a professor of communication, raised the expected objection, claiming that newspapers face questions of credibility if their existence depends on those they write about.

"Even if the paper covers government officials critically, readers may still have their doubts about whether they are getting the full story."

But another journalism professor, Jack Lule, said subsidies may help newspapers make the transition from print to net and noted that America's first newspapers got state and federal assistance.

He said: "We're at a point in our history now where it seems foreign to us but actually we can find a lot of examples of that, and I do believe it's part of our future."